Friday Wrap: The Dollar Index Stalls at Its Summer Ceiling
A quick weekly wrap before the weekend.
The dollar’s post-July-shock recovery has stalled. Against the majors, the greenback is roughly flat on the week: EUR/USD at 1.1556, USD/JPY at 157.89, GBP/USD at 1.3491. But the internals are more interesting than the headline. The dollar actually gained against the commodity bloc — AUD, NZD, and the Scandies all weakened — while losing slightly to the euro and sterling.
A two-speed dollar
That split tells a nuanced story. The growth-sensitive currencies are selling off on global slowdown worries, while the funding currencies (euro, sterling) hold firm on rate support. In other words, the market isn’t buying “American strength” right now — it’s selling “global weakness.” The dollar is winning by default, not by virtue.
That’s a more fragile form of dollar strength than the June version. It can reverse quickly if risk sentiment improves, because there’s no rate story holding it up.
Weekend levels
EUR/USD: 1.1504 support, 1.1580 resistance. USD/JPY: 156.83 support, 159.05 resistance. GBP/USD: 1.3420 support, 1.3530 resistance. EUR/JPY: 181.30 is the line that must hold for the carry rebuilders.
Have a good weekend. The market will still be here Monday, and so will the levels.
Disclaimer: This is market commentary, not investment advice. FX trading carries substantial risk of loss.
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